BONGIORNO: Finance Minister Penny Wong, good morning Minister.
WONG: Good to be with you, Paul.
BONGIORNO: Just picking up on one of those stories, Channel 9 apparently has given assurances therell be no campaigning during their football commentary this afternoon, but Steve Mortimer, a league legend, hell be telling the crowd on huge TV screens and in the commercial breaks that your pokie reforms are un-Australian. Thats a lot of pressure, isnt it?
WONG: I think its really important in this debate to remember what were talking about. Were talking about vulnerable families. Were talking about the 160-odd thousand Australians the Productivity Commission found to be problem gamblers, people who spend on average $21,000 a year on their addiction. Money thats not spent on children, money thats not spent on going to the footy, people who have a serious addiction, vulnerable families. Thats what this reform is about.
BONGIORNO: So are you saying that this campaign, which is targeting vulnerable Labor MPs in very marginal seats, will make no difference to the Government?
WONG: I think weve got to keep focused on whats important and whats right. And I think most Australians would agree, were a country that does look after vulnerable people, were a country that tries to lessen social harm, and were certainly a country that tries to support people out of their addictions. And for that group of Australians, this is a serious problem. For their families and their friends, this is a serious problem. And I think we need to remember the values that were trying to bring to this policy area at this time.
BONGIORNO: Well going to the global financial context, which of course is the context for the Tax Forum this week but I suppose at the outset, can Australia afford another stimulus package if America and if Europe plunge further into financial crisis?
WONG: First, these are challenging times globally. These are, as your news item spoke about, these are times where we see a lot of volatility on global markets. Here in Australia, what Id say to you is this, we have very strong public finances. We have very low public debt. Our net debt is about one tenth of the average of the major advanced economies. And as the IMF and others have said, Australia does have the policy flexibility, if we needed to respond, but were not at that point and its too early to make that judgment. What is important is a credible, clear fiscal strategy, Paul.
BONGIORNO: OK, but
WONG: Thats whats important.
BONGIORNO: Well just picking up on the word you used there, the flexibility to respond, that means going further into debt if you have to.
WONG: But as I also said, the Government remains determined to implement its fiscal strategy, and the Treasurer made that very clear when we stood up with the Final Budget Outcome. We believe its extremely important to implement the fiscal strategy that weve laid out.
It puts us in stark contrast, if I may say, to the economic irresponsibility of the Opposition. A $70 billion black hole. A complete refusal to provide their costings transparently to the Australian people, to show what they would do with the budget. And an Opposition which talks down the economy. We want to implement our fiscal strategy, and were determined to do so.
BONGIORNO: Talking about the Opposition, shadow finance minister Andrew Robb says the $47.7 billion deficit for last years budget is shameful. Here he is.
[Recording]
BONGIORNO: Hard to argue with that.
WONG: What is disgraceful is a man who wants this job, who says on your program, yes, acknowledges there is a $70 billion black hole in the Oppositions budget numbers, who refuses to ensure that his policies are costed transparently and demonstrated to the Australian people, and who talks down the economy. Thats what is disgraceful.
If you want to have a clear and credible fiscal strategy, you dont do it by engaging in name-calling and a bit of rhetoric. You do it by making the hard decisions like the Government has made to take savings, to respond to the global financial crisis by stimulating the economy, but then by being very clear about how we exit deficit and come back to surplus. Thats not a discipline, under Mr Abbott, that the Opposition have ever shown.
BONGIORNO: Well are you saying to us that the budget surplus, and a return to it in the next financial year, is in fact holy grail for the Government?
WONG: What Im saying is that making sure we have a credible, clear fiscal strategy that we hold to is sound economic policy. Its responsible economic policy. Thats why we remain determined to implement the plan to bring the budget back to surplus in 2012-13. Paul, if you look at global markets at the moment, and you see the sort of volatility that weve been talking about, particularly in Europe, one of the things that is very clear is that markets demand clear, credible fiscal strategies from Government.
BONGIORNO: Alright Minister-
WONG: We understand that.
BONGIORNO: Its time for a break. When we return with the panel, some helpful suggestions for the Tax Summit.
BONGIORNO: Youre on Meet the Press with Finance Minister Senator Penny Wong. And welcome to the panel Misha Schubert from the Sunday Age, and Marius Benson from ABC NewsRadio. Good morning Misha and Marius.
SCHUBERT: Good morning.
BENSON: Morning Paul.
BONGIORNO: The country Independents made a Tax Summit a condition of their support for the Gillard Government. The Government now says its a Forum and has put the GST and minerals tax off limits. That hasnt stopped the Summit suggestions flooding in, like this one from Uniting Care.
[Recording]
SCHUBERT: Minister, can we start with superannuation. Are super tax breaks too generous, and why should all income coming out of super funds after people turn 60 be tax-free?
WONG: As you know superannuation is a very important Labor reform. It is a reform put in place by a Labor Government, and its a reform thats enabled superannuation to move from the province of the very wealthy to something all working Australians can have access to. And theres a whole range of different policy objectives youre juggling when it comes to superannuation. But probably the most important one is to ensure you give people the incentive to save and the ability to have a secure retirement. Thats very much what the Governments focus is.
SCHUBERT: I dont think very many people would quibble with that. But the extent to which people on very high incomes get a massive benefit while those at the lower end of the income spectrum get a much smaller benefit. Is that something that sits comfortably with your Labor values?
WONG: I think weve looked across the board with retirement incomes, and weve put in place a range of changes, including those which benefit low income earners. I mean Misha, youd remember that weve put in place, I think, the largest increase in the aged pension, dollar increase that any Government ever has. So a maximum a pensioner is$148 a fortnight better off than they were prior to our changes. So we are a Labor Government and we do bring Labor values to the issue of retirement incomes and the issue of the economy across the board.
BENSON: Senator, the Tax Forum is not your idea. The suggestion for many people is it will just be a talkfest. Can you guarantee there will be action from this beyond words?
WONG: Im looking forward to the Tax Forum. And Im looking forward to it because I think we are an economy that is in the middle of a lot of change. Weve talked about the patchwork economy, but thats really a description of whats happening now. We need to think also about where do we want to get to. How do we support the changes that we need to continue to be a prosperous, modern economy in the years ahead, knowing the sorts of changes were seeing in the globe and the changes therefore well see in Australia. And tax is an important part of that. We need to think through what is the fairest way, what is the best way to improve our productivity, to improve participation, to continue to grow our economy and to support the sorts of changes that we know will happen.
BENSON: But those sentiments are often expressed by many people routinely. Will any action come from this beyond words like those?
WONG: Well, I think its a little unfair to say theres only been words. This Government has put in place some 32 of the reforms recommended by Dr Henry in the Henry Tax Review. If you look for example at the Clean Energy Package, one of the things that is going to be implemented is a tripling of the tax free threshold. The Treasurer has flagged a range of issues that we want to have a discussion with business and the community about
BENSON: But I was asking about the things actually tied to the discussions on Tuesday and Wednesday. Will any action flow from that?
WONG: I think the Im not sure what you mean by that. In the sense that will there be a large communiqu
BENSON: Change, policy change.
WONG: This is all about talking about policy change
BENSON: Talking about it.
WONG: And about prioritising it. You need to work out what is the best policy change as we go forward. And thats what the Forum enables us to do.
BONGIORNO: Well Minister, we
WONG: And certainly there are a lot of different views. You put, I think, Uniting Cares view. Weve seen the Business Council of Australia also put their view. There are a range of different views out there, and I think this is an important discussion to consider what are the priorities. We know what our fiscal circumstances are in the short and longer term. They have to bound the debate, the parameters of the debate. But it is important to say, well, what are the things that we think are the greatest priority, certainly in the near term, what are the things that we think we need to look at in the longer term?
BONGIORNO: OK.
WONG: As the Treasurer said, tax reform is
BONGIORNO: Well we have a
WONG: Youve always got to keep working at it.
BONGIORNO: We have a question from Facebook from (inaudible), he wants to know, are you going to bring back death taxes?
WONG: I dont think anybodys suggested that. I think the Greens might have put that on the radar at the last election, but thats certainly not the Governments position. (laughs) But people can raise things at the Tax Forum. The Governments made its position on that issue and a number of other issues clear.
I think the more important thing is to think through things such as the tax treatment of losses, the sort of ways in which tax reform can support and facilitate the changes we know are already happening in our economy. For me, that seems to me to be one of the key priorities.
SCHUBERT: Minister, you were saying earlier that its responsible economic policy in your view to return the budget to surplus in the next financial year. But if there is a significant economic downturn in Australia, may it not become responsible economic policy to actually intervene again and have Government push out a second stimulus package? What are the triggers that in your mind would force the Government to rethink its surplus strategy? Would it be Treasury forecasting unemployment rising to 8 per cent, or a sudden sharp drop in consumer sentiment?
WONG: I think a clear, credible fiscal strategy is important. You are right, we have said that where the global economy is, the sort of volatility were seeing, the slower growth were seeing, obviously that has an effect on Australia, notwithstanding the fact that we do have very strong underlying fundamentals. But the Government remains committed to its fiscal strategy for the reasons Ive outlined.
BONGIORNO: Well Minister the Parliamentary recess hasnt seen Tony Abbott soften his Opposition to the Malaysian Solution for stopping the boats. Here he is.
[Recording]
BENSON: Minister, from your narrow perspective as Finance Minister, is there a bit of a silver lining to the cloud on detention debate, because onshore processing is at least less costly than offshore processing.
WONG: I try not to have too narrow a perspective as Finance Minister. I think you should have the long term perspective and the whole of Government in perspective in this job, and thats what I try to do. Can I say on that, Tony Abbott is really being quite oppositionist. Hes essentially saying, do it my way or no way at all. And lets remember, the amendments that the Prime Minister has put forward are amendments which would enable a Government of either persuasion to put in place the offshore processing regime that it thinks fit. In terms of costs, as the Coalition know from their time in Government, this is an area of policy that is expensive. It is expensive offshore and onshore. It is expensive to maintain a system of detention and processing, but that is something both parties in Government have had to deal with.
BONGIORNO: Thank you very much for being with us this morning, Penny Wong.
WONG: Good to be with you all.
ENDS